US Tariffs: Making America Great Again, or Just Alone?

Zamir Assadi

When Donald Trump returned to the White House in 2025, so did one of his hallmark economic tools: tariffs. Wrapped in stars, stripes, and tough talk about American strength, the latest wave of tariffs was intended to bring factories back, narrow the trade deficit, and, once again, “Make America Great.”

Now, with the July 9 grace period nearing its end, Trump said on Tuesday that he was not thinking of extending the deadline for countries to negotiate trade deals with the US.

Yet, the rising inflation and growing discomfort among allies suggest that the costs of this economic nationalism are becoming harder to ignore.

Jobs, Bills, and Less Growth

Latest findings from report titled “Trade Wars No Winners: Assessing the Global Impact of US Tariffs” by KTrade Securities show that the results aren’t exactly the victory lap the US administration was hoping for. The unemployment rate is projected to be 0.3 percentage points higher than it would be without tariffs, with 394,000 fewer jobs in the country by year-end. Longer term, labor force participation and employment could fall further if the tariffs remain in place.

Quite a few American consumers, too, are feeling the pinch. It is estimated that household purchasing power has declined by an average of $1,700, as higher import costs ripple through the economy. As per the Budget Lab at Yale, the 2025 tariffs have pushed up consumer prices across key goods, with short-run spikes of 33% for leather products, 28% for apparel, and 13.6% for cars. Even after global supply shifts, prices remain elevated - up to 18% for leather and 11.9% for vehicles - adding roughly $5,700 to a new car’s price.

Yearly forecasts also reflect these domestic headwinds. The International Monetary Fund has downgraded US GDP growth to 1.8% for 2025, citing tariff tensions and broader policy uncertainty. Some are even more pessimistic. In its newly released Mid-Year Market Outlook 2025, J.P. Morgan Research cut its US growth forecast to 1.3%, down from 2.0%.

Friends Don’t Like Threats

Looming domestic damage is serious, but its global effects could be even greater. Ali Farid Khwaja, Chairman of KTrade Securities, warned that current tariff policies are undermining the pillars of the global economic order - free markets, open trade, and legal predictability.

Questions arise over this shift in global posture, which isn’t just reactive but reflects a deeper loss of confidence in the US-centered international economic framework. “If we move into a world with no functioning global market, no property rights protection, and no policy consistency,” Khwaja said, “then every country will be forced to rethink not just its economic model, but also its trade and geopolitical relationships. The result isn’t just uncertainty for emerging markets; it’s systemic confusion for the entire global economy.”

Yearning for stability, countries are no longer waiting around.

In March, Canada responded by imposing 25% counter-tariffs on roughly C$30 billion of US imports, including steel, aluminum and vehicles, sending a clear signal that Canada won’t simply absorb unilateral US trade pressure. Mexico has taken a similar path, matching US duties with its own and leaving the door open to broader countermeasures. Under the constraints of USMCA neither country can fully decouple, but both are clearly hedging.

Further afield, Australia is accelerating trade diversification, with less than 5% of its exports going to the US. Policymakers in Canberra are actively steering businesses toward Asia, the EU, and the UK, where the UK-Australia Free Trade Agreement (2023) and the pending EU-Australia deal represent deliberate efforts to create robust alternatives to US markets.

The UK, meanwhile, has chosen a strategy of non-retaliation. By refusing to engage in tit-for-tat tariff wars, London is marketing itself as a stable, rules-based alternative to an increasingly unpredictable US economy. And in the background, China continues to strengthen domestic demand and trade deeper into Africa, Asia, and Europe.

So… Great Again?

There’s no denying that the tariff strategy has its fans, especially among those who view globalization as a raw deal for American workers.

In theory, reducing dependency on foreign rivals and reshoring critical industries makes strategic sense. But in practice, the numbers tell a different story. On top of that, America’s trade partners are no longer treating tariffs as a temporary storm, but as a new normal worth moving beyond, whether through retaliation, diversification, or quiet withdrawal.

Tariffs might score political points in the short term, but if the long-term effect is inflation, isolation, and instability, the question must be asked: Is America being made great again… or just making everyone else look for a plan B?